During the quarter ended 3/31/2015, Clarke Biscuits Inc. collected $100 of cash from customers, paid $60 of cash to suppliers, paid $20 of cash to employees and other creditors, and recorded $10 of depreciation expense. There were no other cash flows related to operating activities.

Question

What was Clarke’s Cash Flow from Operations during the quarter ended 3/31/2015?

$10

$30

$(20)

$20

$100

1 point
2.
Question 2
During

Answer 1

To calculate Clarke Biscuits Inc.'s Cash Flow from Operations (CFO) for the quarter ended 3/31/2015, we start with the cash collected from customers and subtract the cash paid to suppliers and any cash paid to employees and other creditors. Depreciation expense is a non-cash item and does not affect cash flow since it is already accounted for in the cash paid.

Here's the breakdown:

1. Cash collected from customers: $100
2. Cash paid to suppliers: $60
3. Cash paid to employees and other creditors: $20

Now, we can calculate the Cash Flow from Operations:

\[ \text{CFO} = \text{Cash collected from customers} - \text{Cash paid to suppliers} - \text{Cash paid to employees and other creditors} \]

\[ \text{CFO} = 100 - 60 - 20 \]

\[ \text{CFO} = 100 - 80 \]

\[ \text{CFO} = 20 \]

Therefore, Clarke’s Cash Flow from Operations during the quarter ended 3/31/2015 was $20.